NEW YORK: OPEC and allied oil-producing countries decided Thursday to maintain the amount of oil they pump to the world even as the new omicron variant casts a shadow of uncertainty over the global economic recovery from the coronavirus pandemic.
Officials from OPEC countries, led by Saudi Arabia, and their allies, led by Russia, voted to stick with a pre-omicron pattern of steady, modest monthly increases in oil releases — a pace that has frustrated the United States and other oil-consuming nations as gasoline prices rise.
The OPEC+ alliance approved an increase in production of 400,000 barrels per day for the month of January.
The fast-mutating variant led countries to impose travel restrictions when it emerged late last week. In a worst-case scenario, lockdowns triggered by omicron could cut oil demand by nearly 3 million barrels per day in early 2022, according to projections by Rystad Energy.
Positive news about drugs to treat the variant or the vaccines’ effectiveness against it could improve that outlook. But even with positive news, a decrease in oil demand is likely because “the distribution of these remedies may not actually reach all markets with extreme immediacy, which would still necessitate the lockdowns in much of the developing world,” said Louise Dickson, senior oil markets analyst for Rystad.
The price of a barrel of US benchmark crude fell with news of the variant and then fell further as OPEC+ revealed it wasn’t going to curtail production. It was about $78 a barrel a week ago and was trading at about $66 a barrel Thursday. International benchmark Brent crude followed a similar path, falling from $79 a barrel a week ago to about $69 on Thursday.
The decision by OPEC+ to stay the course sends a signal that “the group does what it says and that they will continue their policy on their own terms,” Dickson said. “It also really signals that OPEC+ needs a bit more time to really dig into the numbers on the omicron variant.”
Some analysts had predicted that the OPEC+ alliance — made up of OPEC members and allied non-members like Russia — would act cautiously Thursday, pending more clarity from medical experts on the new variant.
Before omicron’s appearance, the OPEC+ meeting had been shaping up as a potentially fraught moment in a growing dispute between oil-supplying nations and oil-consuming ones, as the global economy rebounds from the worst of the pandemic downturn and demand for oil surged.
Angering the US and its allies, OPEC+ has stuck to a plan to open the petroleum taps bit by bit — even as oil prices surged to seven-year highs — until deep production cuts made during the depths of the pandemic are restored.
With rising gas prices putting him under political pressure at home, President Joe Biden last week responded to OPEC’s refusal to increase supplies more quickly by announcing the US and other nations would release tens of millions of barrels of oil from their strategic reserves, boosting supplies and temporarily lowering prices. But gasoline prices in the US barely moved.
And then, omicron’s emergence unsettled those dynamics.
White House press secretary Jen Psaki said Thursday that there are no plans to slow releases from strategic reserves, despite the advent of the variant and OPEC’s decision.
“We welcome the decision today to continue the 400,000 barrels-per-day increase,” Psaki said. “We believe this should help facilitate the global economic recovery.”
OPEC+ will meet again Jan. 4.
OPEC+ sticks to modest boost in oil output despite omicron
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OPEC+ sticks to modest boost in oil output despite omicron
WHO chief says reasons US gave for withdrawing ‘untrue’
- US Secretary of State Marco Rubio and US Health Secretary Robert F. Kennedy Jr. announced in a joint statement Thursday that Washington had formally withdrawn from the WHO
- And in a post on X, Tedros added: “Unfortunately, the reasons cited for the US decision to withdraw from WHO are untrue”
GENEVA: The head of the UN’s health agency on Saturday pushed back against Washington’s stated reasons for withdrawing from the World Health Organization, dismissing US criticism of the WHO as “untrue.”
Tedros Adhanom Ghebreyesus warned that US announcement this week that it had formally withdrawn from the WHO “makes both the US and the world less safe.”
And in a post on X, he added: “Unfortunately, the reasons cited for the US decision to withdraw from WHO are untrue.”
He insisted: “WHO has always engaged with the US, and all Member States, with full respect for their sovereignty.”
US Secretary of State Marco Rubio and US Health Secretary Robert F. Kennedy Jr. announced in a joint statement Thursday that Washington had formally withdrawn from the WHO.
They accused the agency, of numerous “failures during the Covid-19 pandemic” and of acting “repeatedly against the interests of the United States.”
The WHO has not yet confirmed that the US withdrawal has taken effect.
- ‘Trashed and tarnished’ -
The two US officials said the WHO had “trashed and tarnished” the United States, and had compromised its independence.
“The reverse is true,” the WHO said in a statement.
“As we do with every Member State, WHO has always sought to engage with the United States in good faith.”
The agency strenuously rejected the accusation from Rubio and Kennedy that its Covid response had “obstructed the timely and accurate sharing of critical information that could have saved American lives and then concealed those failures.”
Kennedy also suggested in a video posted to X Friday that the WHO was responsible for “the Americans who died alone in nursing homes (and) the small businesses that were destroyed by reckless mandates” to wear masks and get vaccinated.
The US withdrawal, he insisted, was about “protecting American sovereignty, and putting US public health back in the hands of the American people.”
Tedros warned on X that the statement “contains inaccurate information.”
“Throughout the pandemic, WHO acted quickly, shared all information it had rapidly and transparently with the world, and advised Member States on the basis of the best available evidence,” the agency said.
“WHO recommended the use of masks, vaccines and physical distancing, but at no stage recommended mask mandates, vaccine mandates or lockdowns,” it added.
“We supported sovereign governments to make decisions they believed were in the best interests of their people, but the decisions were theirs.”
- Withdrawal ‘raises issues’ -
The row came as Washington struggled to dislodge itself from the WHO, a year after US President Donald Trump signed an executive order to that effect.
The one-year withdrawal process reached completion on Thursday, but Kennedy and Rubio regretted in their statement that the UN health agency had “not approved our withdrawal and, in fact, claims that we owe it compensation.”
WHO has highlighted that when Washington joined the organization in 1948, it reserved the right to withdraw, as long as it gave one year’s notice and had met “its financial obligations to the organization in full for the current fiscal year.”
But Washington has not paid its 2024 or 2025 dues, and is behind around $260 million.
“The notification of withdrawal raises issues,” WHO said Saturday, adding that the topic would be examined during WHO’s Executive Board meeting next month and by the annual World Health Assembly meeting in May.
“We hope the US will return to active participation in WHO in the future,” Tedros said Saturday.
“Meanwhile, WHO remains steadfastly committed to working with all countries in pursuit of its core mission and constitutional mandate: the highest attainable standard of health as a fundamental right for all people.”
